Friday to Monday....

[harry20]

Erm, no easy way to say this, Section A of my company is making me redundant, though I'm currently temporarily assigned to Section B. Section B want me to carry on working on project X, can't transfer me from Section A to B or rehire me as a full time employee.

So....they are going to try and rehire me as a ltd company, they have many contractors working for them already, and apparently it'll make it through HR.

Clearly, I *think* this leaves me inside IR35 by the longest chalk, not to mention tax implications on my ex-gratia payment. I really like working for Section B, and this seems an easy way to dip my toe in the contractor water, however, I am worried being inside IR35 will leave me worse off overall. I'm happy to pay my own expenses etc, try and pick up other contracts throughout the year to try and take myself out of IR35, but I feel it won't be enough.

Any suggestions? Ideas? Creative thinking? I'm just in the process of setting up my ltd and will speak to a tax accountant at some point who I'm assuming will say, "Why did you bother....".

Additional info, Section B has just made noises to say they'd hire me back as a PAYE contractor though an agency (Which apparently has been done before in a similar situation), though they are also making noises about ex-gratia giveback....

I can't find an emoticon to describe how I'm feeling.

[pmeswani]

Erm, no easy way to say this, Section A of my company is making me redundant, though I'm currently temporarily assigned to Section B. Section B want me to carry on working on project X, can't transfer me from Section A to B or rehire me as a full time employee.

So....they are going to try and rehire me as a ltd company, they have many contractors working for them already, and apparently it'll make it through HR.

Clearly, I *think* this leaves me inside IR35 by the longest chalk, not to mention tax implications on my ex-gratia payment. I really like working for Section B, and this seems an easy way to dip my toe in the contractor water, however, I am worried being inside IR35 will leave me worse off overall. I'm happy to pay my own expenses etc, try and pick up other contracts throughout the year to try and take myself out of IR35, but I feel it won't be enough.

Any suggestions? Ideas? Creative thinking? I'm just in the process of setting up my ltd and will speak to a tax accountant at some point who I'm assuming will say, "Why did you bother....".

Additional info, Section B has just made noises to say they'd hire me back as a PAYE contractor though an agency (Which apparently has been done before in a similar situation), though they are also making noises about ex-gratia giveback....

I can't find an emoticon to describe how I'm feeling.

Are you entitled to redundancy? If so, are you prepared to lose it in favour of becoming a supplier of services to the company?

[cojak]

I'd keep the redundancy and go contracting for another company.

Sod 'Em - they're doing you no favours, they've dumped and they're giving you the impression that they're doing you a favour while taking your money off you.

Go to the Welcome/FAQ forum and find out how to get a contract.

[malvolio]

I'd keep the redundancy and go contracting for another company.

Sod 'Em - they're doing you no favours, they've dumped and they're giving you the impression that they're doing you a favour while taking your money off you.

Go to the Welcome/FAQ forum and find out how to get a contract.

Yep, totally agree. If they have a job for you there's no reason on earth they want to take you on as a contractor other than as a way to get out of their responsibilities as an employer and save themselves a chunk of money. Walk away unless they give you a real job: every other option is not worth considering.

You want to be a contractor, be a contractor, not a disguised employee.

[harry20]

Are you entitled to redundancy? If so, are you prepared to lose it in favour of becoming a supplier of services to the company?

I am entitled, it's a reasonable package, how much I want to give back for the sake of secured employment...is the golden question.

I guess the day rate is the key to whether being inside IR35 is worth it or not, giving back separation is worth it or not, I think that is what all of this boils down to, pros outweighing the cons.

I agree with the point about going contracting elsewhere, perhaps my loyalty is mis-guided...

[cojak]

I am entitled, it's a reasonable package, how much I want to give back for the sake of secured employment...is the golden question.
...

Secured employment??? You mean more secure than now??

You're joking, right? They can hire you for a couple of months, take your money off you then dump you on your arse (again) without so much as a by your leave - and not pay you a penny, cos you're a contractor now.

I suggest you wake up to your situation. Go back them if you want but be very aware that there is *no* loyalty on their side, just cost-reduction.

[Fred Bloggs]

Given that I agree there will be no loyalty on the company's side, the OP could consider turning up as a contractor until he finds another contract then dump the ex-employer just they're dumping the OP. If it was a very short term contract HMRC won't look to persue IR35 for a few days/weeks anyway I believe. But I agree, the OP needs to look elsewhere.

[cojak]

I wouldn't be prepared to lose my redundancy money for them Fred, better to use the notice period as a permie and find another contract.

[malvolio]

I am entitled, it's a reasonable package, how much I want to give back for the sake of secured employment...is the golden question.

You don't get to negotiate, it will be treated as earned income and liable to full PAYE and NICs. You can't be redundant if you continue doing the same job (and no it doesn't count that it's for a different bit of the company)

I guess the day rate is the key to whether being inside IR35 is worth it or not, giving back separation is worth it or not, I think that is what all of this boils down to, pros outweighing the cons.

Total salary /1000 = hourly rate, for a simple comparison. Then inside IR35 you get to keep 60-65% of it. Probably not enough.

I agree with the point about going contracting elsewhere, perhaps my loyalty is mis-guided...

I say again you want to be a contractor, be a contractor. And that needs a major mindset adjustment!

[Fred Bloggs]

I wouldn't be prepared to lose my redundancy money for them Fred, better to use the notice period as a permie and find another contract.

True, but I do know folks who have managed to hang on to their pay off and still do Friday/Monday.